By: Joseph Brown

Joseph Brown — Fri, 14 Mar 2014 09:24:08 +0000

Who’s exploiting who?
It’s a familiar clarion call: poverty-ravaged Africa countries are being raped by avaricious Chinese investors intent on the systematic pillage of the continent’s natural resources for its own ends.
But who is really exploiting who?
Chinese firms – backed by their government – are injecting billions of dollars of “friendship” money into African countries to develop infrastructure such as roads, ports, football stadia, agriculture with a widely understood quid pro quo that it is buying African loyalty and influence in the foreign policy diplomacy game of chess between East and West.
But Africa’s leaders are creaming off millions from lucrative side-deals and now questions are being asked about whether it is not China that is being taken for a ride by its developing country “beneficiaries”.
Mozambique is a case in point. The southern African ranks third from bottom in the United Nations Human Development Index. President Guebuza signed 12 financial agreements with China during a state visit to China in 2011, including $15.8 million for distance education and science and technology programs, half as donations and half as interest-free credit. Guebuza regularly praises China, describing it as a partner and not a colonizer. China Kingho Energy announced it would provide initial funding for construction of a coal terminal at the port of Beira and upgrade the Sena rail that links the Moatize coal mines in northwest Mozambique. One of the most recent projects was the launching of a Center for Cooperation on Poverty Reduction, which will draw on Chinese strategies for dealing with poverty.
All worthy causes with sound economic, social and development rationales.
But there are also more questionable projects: a US$439 million housing project in a middle class suburb of Maputo, for example.
More recently, Mozambique’s digital migration TV project is being implemented by Startimes and Huawei Technologies and looks unlikely to generate the expected benefits on its huge investment for many years to come, while a State Information and Security Service project awarded to ZTE to intercept and monitor private citizen’s internet and phone use in the name of national security in the run-up to the general elections in October this year. Similar concerns have been expressed about airport construction work by another Chinese company, SOGECOA.
Chinese companies bid for contracts backed by the promise of government funding from its Exim Bank, yet it is the politician and officials on the ground in Maputo or elsewhere that decide how the money should be spent and accounted for. It is a recipe for corruption.
The Exim Bank’s loan evaluation procedures and the supervisory role of the Chinese Embassy in Mozambique are also being called into question.
The irony is that in many cases it is China itself that is being exploited through the systematic manipulation of funding facilities, over-inflation of contract prices, syphoning of money from infrastructure projects and diversion of Chinese government money into the private pockets of corrupt leaders.
According to the Economist Intelligence Unit: "Corruption has become a major concern in Mozambique. A small elite associated with the ruling party and with strong business interests dominates the economy."

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By: Joseph Brown